Gann Analysis of Euro Vs Usd

As shown on the Euro vs Usd chart below, one technique which WD Gann
explained was finding the mid point between the highest and lowest that a
security had traded.

Point 1. Shown on the chart is marked with a tan line which
represents a major support level that may become active very soon. It is
just above the 1.2000 level.

Point 2. Shown by the red line
and red arrows represent old resistance / old support. Gann explains
that once resistance is broken, usually it becomes support. The red
arrows show clearly this to be the case on many instances in the past
twelve years since the Euro has been trading. This level is near the
1.2000 mark.

If price trades down toward 1.2000 we can expect
to see a high level of probability that it will react at this level. The
chances are high that if it hits this level it will move back up again
from here.

Eur/Usd chart January 1999 to January 2011

Remember that these are only a couple of chart reading techniques suggested by WD Gann.

In
his own words, "It is possible to get as many as nine confirmations of
reasons why a market should be at a bottom or top at a certain time. And
the greater number of confirmations, the surer the chances of (reaping
rewards)."